“You only find out who is swimming naked when the tide goes out,” wrote Warren Buffett.

1. Chinese exports power higher, inflation remains relatively tame — China’s exports climbed a greater-than-expected 12.7% on year in November and helped the country’s trade surplus increase 8.7% to $33.8B, the highest level since January 2009. Inflation also nudged down to 3% from 3.2% as a rise in food prices eased. The trade figures indicate that the global economy is beginning to tick along swimmingly, while the softening inflation could give China’s central bank room to refrain from further tightening.
2. Treasury exits rest of GM stake and makes loss of $10.5B — the government has sold the remainder of its 31.1M shares in GM (GM) for $9.2B, which will end restrictions on executive pay and could pave the way for dividends and buybacks. The government recovered $39B out of the $49.5B it invested in the automaker, ending the bailout of GM with a loss of $10.5B.
3. House, Senate leaders agreed to budget deal to prevent Government Shutdown the House and Senate negotiators have reached a budget agreement that sets spending levels for the next two years and replaces some of the automatic budget cuts in the sequester. If the full House and Senate back the proposals, which include modest spending reductions, a government shutdown next month will be averted.
4. Anadarko faces bill of up to $14B over Tronox spin-off — Anadarko Petroleum (APC) shares plummeted 11.6% premarket after Manhattan Bankruptcy judge Allan Gropper ruled that the company would have to pay $5-14B in environmental cleanup and health claims. The case relates to the 2005 spin-off by Kerr-McGee (now a unit of Anadarko) of its chemicals business as Tronox, which fell into bankruptcy in 2009 due to old environmental liabilities. Just three months after the spin-off, Anadarko offered to acquire Kerr-McGee’s oil and natural gas assets for $18B.
5. S&P 1500 Most Heavily Shorted Stocks — the list below highlights the 29 stocks in the S&P 1500 that have more than 25% of their free-floating shares sold short. The 29 names listed, 21 (72%) are small-cap stocks including the 10 most heavily shorted stocks on the list. The remaining eight names, seven are mid caps and Cliffs Natural (CLF) is the only large cap stock.

6. AAII Bullish Sentiment Falls — according to last week’s survey from the American Association of Individual Investors (AAII), bullish sentiment saw a slight decline from 42.64% down to 41.27%. This represents the second straight weekly decline in bullish sentiment and the fifth drop in the last seven weeks. Bearish sentiment also decreased this week, falling from 27.55% down to 25.00%.

The week ahead — Economic data from Econoday.com: